Partnership Flashcards
Creation of partnership
Partnership is formed when two or more persons associate to carry on as co-owners a business for profit. A person who receives a share of profit is presumed to be a partner.
Agency and partnership
Each partner is an agent of the partnership for the purposes of its business and can be bounds on a K entered into by a partner with actual or apparent authority.
Actual authority for K
A partner has actual authority to enter K regarding matters in the regular course of business but must have majority vote
Non ordinary course matter
Actual authority for partner to enter K on matter outside of regular course of business requires unanimous vote
Liability
All partners are jointly and severally liable for debts of partnership. Creditors must first seek compensation for partnership before the individual partners.
Independent contractor
Based off right to control. A principal is not liable for torts of an independent contractor unless estoppel applies.
Dissociation
Change in partnership relationship caused by any partner ceasing to be associated with the carrying on of business. Partner is dissociated upon express will to withdrawal as partner.
Partnership at will
No fixed term for partnership agreed on
Dissolution of partnership at will
If anyone partner gives notices of intent to withdrawal, partnership is dissolved and must be wound up.
Binding after dissolution
Partnership will be bound to partners act after dissolution if the act is appropriate for winding up partnership business. Additionally, partnership bound by act that is not appropriate if 3rd party did not have notice of the dissolution and act would have bound partnership before.
Profits and losses
Absent and agreement stating g otherwise, partners share profits equally and losses pro rata.
